Fisker Automotive: Senators question Fisker’s federal loan

Two Republicans from the U.S. Senate have asked the Obama administration to explain in detail why it approved a $529 million loan to startup Fisker Automotive.

The letter questioned why Fisker was allowed to build its first car, the $100,000 Karma sedan, in Finland, and asked what “technical expertise” the department used to “evaluate, originate, and monitor” Fisker’s loan.

The Energy Department’s loan programs have drawn congressional scrutiny since the bankruptcy of solar-panel maker Solyndra LLC, a loan-guarantee recipient, in September.

Senator Charles Grassley, an Iowa Republican who is his party’s ranking member on the Senate Judiciary Committee, called Fisker “one of the more unusual recipients” of the Energy Department’s vehicle loans in a letter yesterday to Energy Secretary Steven Chu.

Production of Fisker’s Atlantic was to begin later this year, but those plans were put on hold earlier this year when the DOE suspended the automaker’s $529 million federal loan after Fisker failed to reach milestones related to its first car, the $100,000 electric-hybrid Karma sedan, which is built by a contract maker in Finland.

Fisker had drawn down about $193 million. The company, with 47 U.S. dealers, said it has delivered about 800 Karmas and generated more $100 million in revenue.

However Fisker says it has devised an approach that allows it to launch the Atlantic and be profitable without U.S. government loans. So far, it has raised more than $1 billion in private financing since closing its Energy Department loan, the agency said.

The US based automaker will decide before the end of the third quarter where to build the Atlantic, Chief Executive Officer Tom LaSorda told reporters earlier this month. The decision will be based on “what’s best for the company,” not on Energy Department funding, he said.